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Promoting development of innovation and technology industries
2015-12-16

Following is a question by the Hon Charles Mok and a reply by the Secretary for Innovation and Technology, Mr Nicholas W Yang, in the Legislative Council today (December 16):

Question:

Some practitioners from the information technology (IT) sector have relayed to me that although the Government has been committed to developing the innovation and technology industry in recent years, its procurement policy for IT products and services as well as its approach for implementing government IT projects are both unable to dovetail with the development of the local innovation and technology industry. In this connection, will the Government inform this Council:

(1) given that while the Government currently awards its IT contracts to contractors in accordance with the Standing Offer Agreement for Quality Professional Services (SOA-QPS), there are views that the number of such contracts awarded to local small and medium enterprises (SMEs) accounts for a low percentage of the total number of contracts, whether the authorities will, in addition to implementing the existing enhancement measures of splitting large-scale IT projects into multiple small projects and lowering the tender and contract deposits, study and consider the implementation of more enhancement measures in order to encourage SMEs to bid for such contracts and enhance their successful rates; if they will, of the details; if not, the reasons for that;

(2) given that the Innovation and Technology Fund (ITF), under the Innovation and Technology Commission, launched the Public Sector Trial Scheme (Trial Scheme) in 2011 whereby additional funding is provided to completed research and development (R&D) projects funded by the ITF for the production of tools, prototypes or samples and the conducting of trials in public organisations, with a view to promoting the realisation and commercialisation of the R&D results, whether the authorities will consider expanding the scope of the Trial Scheme to include the R&D projects not funded by the ITF and allow more organisations (such as private organisations) to participate in the trials of the tools, prototypes or samples; if they will, of the details; if not, the reasons for that; and

(3) whether it will make reference to the experience of other countries and provide local SMEs in various industries with innovation and technology vouchers, so as to encourage them to procure the relevant products and services (including cloud services and data analyses), thereby promoting the development of the innovation and technology industry; if it will, of the details; if not, the reasons for that?

Reply:

President,

To promote sustained and diversified economic and social development, the Government is determined to develop the local innovation and technology (I&T) industries, in order to drive the upgrading and transformation of our overall economic structure, thereby enhancing Hong Kong’s competitiveness.

My reply to the three parts of the question raised by the Hon Mok is as follows.

(1) The Government has been assisting local small and medium enterprises (SMEs) to compete in the market through multiple measures, including encouraging SMEs to bid for government tenders for information technology projects, and to increase their opportunity to be awarded these tenders. The Office of the Government Chief Information Officer (OGCIO) recruits contractors from the market through periodic open tendering exercises to provide the four most frequently sought categories of IT professional services by government departments, and enter into Standing Offer Agreement for Quality Professional Services with them. The prevailing Standing Offer Agreement for Quality Professional Services 3 (SOA-QPS3) came into effect in July 2013. Amongst the contractors under SOA-QPS3, a number of them are SMEs. In the past two years, IT services procured by the Government under SOA-QPS3 all came from local technology companies, with a total of 159 contracts (24 per cent of the total) awarded to SMEs, involving a total contract value of HK$105.09 million (20 per cent of the total).

In terms of government projects, the OGCIO introduced in February 2014 measures to encourage government bureaux and departments to break down large-scale IT projects into multiple projects of smaller size, and to lower the tender and contract deposit levels. These measures have helped increase the chance for SMEs to be awarded government contracts. In addition, the OGCIO also encourages local suppliers (including SMEs) to bid for government tenders for IT projects through a series of measures. The measures include:

– providing “Quarterly Catalogue of Opportunities for Private Sector Participation” on the website of “Digital 21 Strategy”;
– launching platforms such as “Suppliers Community Portal” and “IT Promotion Database” on the OGCIO website, so as to facilitate suppliers (including SMEs) to introduce their scope of business and products to all government bureaux and departments;
– launching the e-Procurement website to improve the tenderers’ efficiency and reduce their efforts in preparing tender submission; and
– avoiding awarding to the same tenderer if the tender involves more than one contract.

On the condition of not violating the Agreement on Government Procurement of the World Trade Organization, the Government will continue to consider other feasible measures to encourage local suppliers (including SMEs) to tender for government IT projects.

(2) The Government has always been supporting different organisations to carry out R&D, and has introduced the Public Sector Trial Scheme (PSTS) to provide additional funding support to completed R&D projects funded by the Innovation and Technology Fund (ITF) for conducting trials in the public sector. The PSTS has so far supported over 100 projects, involving a funding of $160 million. These trial projects were applied in many different public organisations and benefited various sectors of the community.

To further promote the adoption of R&D outcomes funded by the ITF in the public sector, we have raised the funding ceiling of PSTS from 30 per cent of the original R&D project cost funded by the ITF to 50 per cent in 2014. The funding ceiling for projects undertaken by R&D Centres can even reach 100 per cent. The purpose is to encourage the conduct of trials in larger scale, which would facilitate a more holistic assessment of the new technology in order to help improve the products and services. We will consult the industry and relevant stakeholders and consider whether to further expand the scope of the PSTS.

(3) The Government has been encouraging enterprises (including SMEs) through different measures to proactively learn about the trends of I&T development, use more technology products and services, so as to enhance their competitiveness in the globalised market.

The “Sector-specific Programme” and “IT Training Programme for SMEs” introduced by the OGCIO develop suitable I&T applications, including cloud computing technology, for SMEs of different sectors, and provide relevant technology training for them. Around 38 000 employees in SMEs were already benefited.

To enhance SMEs’ understanding of cloud computing applications, the OGCIO published the “Practice Guide for Procuring Cloud Services” in 2013, and showcased success stories of the use of cloud computing on the website. Besides, the OGCIO also launched the “SME Cloud Promotion Campaign”, providing relevant training courses and promotional activities to SMEs.

Different government departments also proactively adopt cloud services. To drive the development of related industries, we provide information of cloud services providers on the website for reference of enterprises (including SMEs).

All of the measures mentioned above encourage SMEs to learn more about and adopt I&T applications, thereby helping them enhance their competitiveness and integrate into the globalised market. We note that certain overseas regions provide “innovation vouchers” or similar assistance to SMEs. We would draw on the experiences of these places, especially the effectiveness of these measures, which would facilitate our consideration on measures to improve technological level and competitiveness of the industry.

Ends/Wednesday, December 16, 2015
Issued at HKT 19:04

Office Of Hon. Charles Mok, Legislative Councillor (IT)